Devices and Orthopedic Consultants: When the Feds Get Serious

The New York Times recently updated us on the federal investigation into kickback payments from the medical device industry to orthopedic surgeons:

http://www.nytimes.com/2008/03/22/business/22device.html?_r=1&scp=1&sq=barnaby+feder+new+focus+of+inquiry&st=nyt&oref=slogin

Round One of this probe netted five leading manufacturers of artificial joints. By any standards, the action was a huge success. While not admitting any criminal wrongdoing, the companies agreed to stop doing what they were doing, paid $310M in fines, and placed themselves under federal supervision for a year in exchange for being let off the hook. The Feds now get to approve in advance any deals these companies make involving payments to orthopedic surgeons in 2008.

The Feds have now gone to a not exactly friendly venue--the American Academy of Orthopedic Surgeons--to announce Round Two. In this round they will take a much closer look at the physician end of the bargain.

As Christopher J. Christie, U.S. attorney in Newark, explaind it, "I've dealt with the supply issue, now I need to deal with the demand issue." I take that language to mean that his office does not view the docs as innocently walking down the street and being accosted by device manufacturers offering them bribes. I gather that instead, he views the highest-rolling surgeons as being in the shakedown business--give me a 6-figure consulting contract and I'll keep using the expensive device your company makes; otherwise I'll jump ship.

Now, if you ask the orthopedists, they say that this has all gotten blown way out of proportion. They insist that most new medical devices are invented by surgeons, and are improved by other surgeons who tinker around with them. Those consulting fees, that is, are paid for real creative work and are not bribes at all. The docs also say that surgeons get used to a particular device because they like its feel or the feel of the tools you use to put it in. They are not going to switch to another just because somebody pays them off.

I have not had an opportunity to ask an orthopedist what he thought about all this. But I did ask a distinguished senior general surgeon, and his reply was not exactly printable. He made it quite clear that he did not think that anywhere near as much real "consulting" ever got done as cash flowed into docs' pockets.

Leaving aside who's right on the device/invention/consulting business, what I am most impressed by in this whole thing is what has happened in a very short span of time because the Feds decided to make a case out of this. Now, maybe nothing like this could happen in pharmaceuticals. Maybe the relatively small number of device manufacturers and surgeons who use the devices, plus the huge sums that were being paid out, allowed the Feds to move ahead in the device arena in a way they never could with drugs. But keep in mind (as I explained in HOOKED) that the very same law is on the books for all physicians. If you see any patients under Medicare or Medicaid, and you accept a gift of any value (including a pen) from a firm that sells stuff (like drugs) to Medicare or Medicaid, and a partial result of that interaction is that you could be influenced to prescribe that drug, then you could be looking at a cell in Leavenworth, according to the letter of the anti-kickback statute.

I guess all it takes is the will.

Feder BJ. New focus of inquiry into bribes: doctors. New York Times, March 22, 2008.